Brian Lenihan says cuts will be ‘well above’ €3 billion

Ireland will have to endure budget cuts of ‘well above’ €3 billion, the finance minister Brian Lenihan told RTE Radio, in the same week he visits Washington for a ‘routine’ meeting with the IMF.

Lenihan and the rest of the Irish government have been tight-lipped about the precise size of the budget cuts required in the December budget, but he admitted that it will require greater cuts than previously suggested. He refused, however, to give a precise figure.

“We have to respond to the real economic realities we face. I don’t believe I should rush into a figure and announce it without very careful analysis,” he said. “The real figure that is agreed upon … is that we have to get our borrowing down, by the end of 2014, to 3% of our annual wealth … if you want to reach that figure, you do require to make a very serious adjustment.”

When pushed on a figure, he said, “The national plan will outline precisely how much you have to do on a year by year basis to 2014. Clearly the figure this year will be well above the existing figure of €3 billion.”

Lenihan also referred to recent efforts to create consensus with the opposition party.

“I very much welcome that Fine Gael and Labour is also signed up to this [the figure of €3 billion],” he said.

“We’re sharing the economic analysis with the other parties. I think it would be very helpful if we could share that sense of a common analysis of what the problem is because if all of the parties subscribe to a common analysis of the economic problems, it will be much easier to secure a united national effort behind jobs, and growth and budgetary correction.”

In relation to the meeting with the IMF, Lenihan said that the IMF was happy with the way Ireland was handling the crisis.

“What the IMF are actually telling us is that we have taken the rights steps as a country and a Government. We’re not telling them that, they’re advising us of that.”